Licensing Guides
A VARA license cost estimate can be accurate and still leave your business underfunded. The application fee is one commitment. Capital, staffing, technology and the cost of operating before revenue begins are separate decisions.
Under VARA’s published schedule, a single activity carries an application fee of AED 40,000 or AED 100,000, plus annual supervision of AED 80,000 or AED 200,000, depending on the activity. Those amounts are the regulator’s fees—not the total cost of establishing and running the firm.
A useful budget answers three questions: what will the business spend, what financial resources must it maintain, and how much unrestricted cash remains available to operate?
This guide separates those commitments and provides three worked examples for assessing the funding required.
The following figures come from Schedule 2 of VARA’s Virtual Assets and Related Activities Regulations, checked on 16 October 2026.
For additional activities, Schedule 2 specifies an extension fee of 50% of the lower application fee, with annual supervision charged per licensed activity. VARA may adjust fees based on the firm’s risk profile. Other authorities’ charges are separate.
When comparing proposals, distinguish regulator charges, commercial licensing costs and professional fees. Each should have its own scope and payment assumptions.
A board-approved budget should distinguish the following:
Paid-up capital should not be presented as money paid to the regulator. Equally, it should not automatically be counted as cash available for salaries.
The funding plan needs to show both the required financial resources and the restrictions affecting their availability. Otherwise, the same cash can appear to fund several commitments at once.
The Company Rulebook sets the following paid-up capital requirements. Except for Advisory Services, the figures below use the higher of the fixed floor or the stated percentage of fixed annual overheads.
Multi-activity firms calculate capital for each activity, allocating overheads without duplication or omission. The permitted holding arrangements include a UAE bank trust account naming VARA as beneficiary, a qualifying surety bond, or another arrangement specified by VARA.
The budgeting implication is straightforward: the staffing and infrastructure plan can change the capital requirement.
A forecast that adds personnel or recurring commitments should therefore trigger a fresh calculation. Keeping the original capital floor unchanged throughout a growing expense forecast can understate the funding requirement.
VARA requires current liquid assets, less current liabilities, to equal at least 1.2 times monthly operating expenses. The calculation must also account for the relevant portion of operational exposure to Virtual Assets agreed with VARA.
Net liquid assets must be reconciled daily and reported monthly. Eligible assets are restricted to cash and cash equivalents, and VARA-approved Virtual Assets referencing USD or AED. Virtual Assets Regulatory Authority (VARA)
For example, assumed monthly operating expenses of AED 300,000 produce a required net liquid asset surplus of AED 360,000.
That does not mean a bank balance of AED 360,000 necessarily satisfies the test. Current liabilities and the eligibility of the assets also matter.
In the financial model, distinguish:
A positive bank balance is useful information. It is not the complete liquidity calculation.
These examples demonstrate the calculations. The overhead assumptions are illustrative, not market estimates, quotations or regulator-approved budgets.
Each example assumes one licensed activity. Fixed annual overheads are assumed to equal twelve times the stated monthly operating expenses solely to simplify the illustration.
Calculations apply the published fee, capital and liquidity rules to the stated assumptions.
These are funding checkpoints, not complete launch budgets. They exclude commercial establishment costs, implementation expenditure and any additional activity-specific obligations.
They also should not be added mechanically. The finance model must establish which assets meet each requirement, what restrictions apply and how expenditure changes the position over time.
The Exchange example demonstrates why quoting only a capital floor can mislead: its assumed overheads produce a higher requirement. The Broker-Dealer example shows the same effect at a different scale.
VARA’s application framework combines four compulsory rulebooks with the rulebooks applicable to the proposed activities. Budget preparation should therefore cover the operating model and control environment as well as the submission itself.
Use scoped quotations and a documented staffing plan for the following workstreams:
This is a planning checklist, not a statement that every firm must procure every item from an external provider.
For each quotation, identify what is included, what remains the firm’s responsibility and what creates an additional charge. A low implementation price can be poor value if material integration or remediation work sits outside scope.
VARA’s insurance rules address professional indemnity, directors’ and officers’ cover, and commercial crime or similar insurance for Virtual Assets held in hot wallets. Coverage must reflect the business’s size, complexity and license conditions.
Premiums in this article are unavailable: they require underwriting and a defined risk profile. Use an actual quotation rather than presenting an assumed premium as an official licensing cost.
VARA describes two stages for new applicants: Approval to Incorporate, followed by the VASP license application.
Its guidance refers to initial review fees typically equal to 50% of the application fee, followed later by the remaining application amount and first-year supervision fees. Approval to Incorporate does not permit Virtual Asset activities.
This creates a financing question: how long can the firm meet its commitments before it can earn the revenue forecast?
Build a monthly model showing when recruitment, premises, supplier subscriptions and implementation payments begin. Revenue should follow the assumed authorization and commercial launch milestones.
Test delays as sensitivities. For example:
At an assumed monthly cash burn of AED 300,000, a three-month delay adds AED 900,000 of expenditure before considering further changes.
That is arithmetic based on an assumption, not a VARA processing-time estimate. The model should also recalculate capital and liquidity where expenses change.
Comparable proposals need the same activity scope and operating assumptions.
Ask each provider to separate:
A proposal should also identify the source and date behind regulatory figures.
The VARA licensing activity assessment matters at this stage because a change in scope can alter the permissions, capital calculation and implementation work being priced.
No. The funding plan also needs to address commercial establishment, implementation, operating expenditure and the applicable financial-resource requirements.
Do not assume it is unrestricted working capital. Assess its prescribed holding arrangement and availability before including it in operating runway.
Compare the complete economics. Any applicable capital treatment needs to be assessed alongside provider fees, integration costs, contractual commitments and the suitability of the arrangement.
There is no universal figure established by the sources used here. Build those lines from the proposed responsibilities, transaction volumes, implementation scope and supplier quotations.
A decision-ready VARA budget should show the licensed activities, dated regulatory figures, monthly expenditure, financial-resource calculations and funding available through launch.
It should also identify the assumptions that could change the result: custody arrangements, additional activities, recruitment timing, supplier commitments and delays.
That gives the board a meaningful funding decision to approve—and a model management can update as the application and operating plan develop.
Planning your VARA licensing budget? Speak with a KOLL licensing expert to assess the activity scope, capital requirements and implementation costs for your proposed operation.
